A small tax break arrived for businesses on Friday. The “temporary” 0.2% unemployment surtax expired Friday after 35 years of existence. The surtax has always been considered “temporary” but had been extended repeatedly through the years until Congress decided not to extend it this time around.
The expiration of the 0.2% surtax effectively lowers the federal unemployment tax rate to 0.6% on the first $7,000 of wages, after taking into account credits for state unemployment taxes paid. Workers do not pay this tax; it is paid by the employer. The savings for employers will amount to $14/worker per year. For larger companies such as Wal-Mart, that will be a savings of nearly $20 million/year.
Read more from the Associated Press.
“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”